Are you a big fish in a small pond, or a small fish in a big pond?
Generally, it’s better to dominate a niche than be a small player in a bigger marketplace. Brand leadership tends to be self-sustaining, for example it is a well-established fact that over half of the marketing communication in a given category is attributed to the brand leader by customers, regardless of which brand was actually communicating. So if you’ve got a great new fizzy cola and you spend lots of money advertising it, most of the benefit goes to Coca Cola or Pepsi, depending on which country you are in.
New customers, especially those who may not know much about what they are buying are also very easily drawn to ‘the leading supplier of … to the …market’.
Also, brand leaders often benefit from economies of scale giving them cost advantages over their competitors.
If you can concentrate your marketing and selling efforts, build a proposition that is very powerful for a small segment of the potential customer base then you might end up as the default choice in that niche, rather than spreading your resources thinly, trying to appeal to everyone and fight off big, powerful, well-established competitors.
Is there a vertical market that you do really well in, or where your current customers think you have a strong advantage over the competition?
What about geography – sometimes customers like to deal with local companies. Could you be the leader in your town, city, county or region rather than servicing the whole country, continent or globe. How many on-profile prospects do your sales and delivery people drive past on the way to a customer?
Of course, your chosen niche has to be viable, capable of delivering the turnover, profit and growth ambitions you have set for your business, and there can be risks if your chosen market is vulnerable to external impacts like legislation, environment, fashion etc. However, it’s probably worth reviewing your current customer base and asking the question:
“Could we be the big fish in that market and what would it mean for our business?”
Chris
Always be a big fish
